Jute Textile Industry in India – UPSC

• The jute textile industry is India’s second textile industry after cotton textiles, and a major industry of the east, above all in West Bengal.
• Called the golden fibre, jute grows back each season and rots away harmlessly, so its packaging has an eco-friendly edge over plastics.
• India is the world’s largest producer of jute, ahead of Bangladesh. About 15% of output was exported around 2023.
• Chain of activities: the industry runs from growing raw jute through fibre processing, spinning, weaving, bleaching, dyeing and finishing to marketing of both raw jute and finished goods.
• Livelihoods: about 40 lakh farm families depend on it directly or indirectly, and about 4 lakh workers have direct jobs in mills and trade, according to a January 2025 government statement.
  • An older break-up gave 2.6 lakh industrial workers and 1.4 lakh in the tertiary sector.
  • It also earns foreign exchange through exports.

Growth and Development

• Handloom origins: jute was woven by hand long before factories arrived.
• First mill: large-scale manufacture began in 1855 at Rishra on the Hugli, near Kolkata, where George Acland installed jute spinning machinery with a Bengali financier.
• Power looms followed, and both spinning and weaving were taken up. Demand for sacking from an industrialising Europe made it an export industry that grew rapidly in the 19th century.
• Partition (1947) created a peculiar problem:
  • Almost all mills stayed in India, while about 75–80% of the jute land went to East Pakistan.
  • Raw jute supply from East Pakistan was cut off by political differences between the two countries.
  • A long campaign to expand jute in the Brahmaputra valley, West Bengal, the Tarai and the eastern coastal areas, along with better yields, later eased the situation.
  • Many sick and inefficient mills closed in the meantime for want of raw material.
• Export dependence: the fortunes of the industry have always followed export demand, and rise and fall with demand for its goods abroad and at home.
  • World War II cut buyers off from Indian supply, and several countries then developed substitutes.

• One bale of raw jute weighs 180 kg.
• Acreage is shrinking: jute and mesta area fell from 13 lakh hectares in 1980-81 to 5.7 lakh hectares in 2024-25, though better yields have softened the fall in output.

Why Production Has Fluctuated

• Jute cultivation fluctuates because of:
  • Dependence on the monsoon, which is erratic, and competition for land from rice.
  • Government policy: the industry leans on public buying, which exceeded Rs 5,500 crore a year in older figures, so a change of policy shakes it.
    • The industry is valued at about Rs 12,000 crore (2023), and the larger part of its offtake is government packaging of food grains.
  • Delay in support prices: late announcement of the minimum support price (MSP) leaves the trade short of cash.
    • The MSP is the rate at which the government buys from farmers, meant to steady prices against changing supply, weak market integration and poor information.
    • Raw jute MSP (TD-3 grade): Rs 5,650 per quintal for 2025-26 and Rs 5,925 for 2026-27, approved on 24 February 2026.
    • The Jute Corporation of India carries out MSP buying, but bought only about 6.24 lakh of about 70 lakh bales in the 2024-25 season.
  • Sales: older figures put business at about Rs 10,000 crore, sold to the Food Corporation of India, sugar mills, cooperatives, the open market and buyers abroad.
    • The Food Corporation alone took 35–40% of mill output.
    • Government jute bag demand slid from 38–39 lakh bales in 2021-22 to an estimated 30 lakh bales in 2024-25.
• Jute goods output fluctuates because of:
  • Labour unrest and political interference, which test the industry’s survival.
  • Fluctuating demand, with synthetic packaging far cheaper.
  • Shortage of raw material, since most jute land went to Bangladesh. Supply has grown since Independence, but it still falls short at times.
• Output of goods: 1,591 thousand tonnes in 2012-13, against 1,582 thousand tonnes the year before. Recent years are weaker, with about 933 thousand tonnes from April 2024 to February 2025.

Location and Distribution

• The industry is highly localised, drawn together by these conditions:
  • Quality jute from the Ganga–Brahmaputra delta
  • Cheap water transport, plus roads and railways
  • Dense population, for cheap labour
  • Abundant water for processing, washing and dyeing
  • Capital and market in and around Kolkata
  • Coal from Raniganj, hardly 200 km from the delta region

Location Factors of the Hugli Belt

• Water:
  • The Hugli River supplies flowing water in abundance.
  • Water is needed for retting, washing and dyeing.

• Transport:
  • The Hugli River gives cheap carriage.
  • A dense network of roads and railways helps the eastern region further.
• Raw material:
  • The Ganga–Brahmaputra delta was credited with about 90% of India’s jute in older accounts, and with over 73% in later ones.
  • State shares of jute and mesta in 2024-25: West Bengal 79.9%, Bihar 9.6%, Assam 8.3%.
  • India now leads the world in raw jute.
  • Shortage after Partition, and strained relations with Bangladesh, led to a campaign in the Brahmaputra valley, West Bengal, the Tarai, the eastern coastal plains and the districts around Kolkata.
  • New varieties such as JRO-632 and JRO-753 give better output.
• Climate:
  • Humid conditions suit the crop.
  • They also suit spinning and weaving, keeping the fibre from breaking.
• Labour:
  • It is labour-intensive, from cultivation through processing and dyeing.
  • The dense populations of West Bengal, Bihar, Jharkhand and eastern Uttar Pradesh supply cheap workers.
  • Older counts give 4 million farmers, mostly small and marginal, and 2 lakh workers.
• Coal and power:
  • Raniganj lies within about 200 km.
  • The Damodar Valley Corporation provides ready power.

• Port:
  • Kolkata port handles imports of machinery and spare parts, and exports of finished goods.
  • Its riverine nature eases the movement of goods.
• Market:
  • The rich hinterland of Kolkata and the industries around it give a ready market.
  • The sugar industry of nearby Uttar Pradesh and Bihar boosted demand for gunny bags.
  • Exports leave through the port close by.
  • India’s rank was first in production and second in exports, behind Bangladesh, in older tables.
  • Jute Packaging Materials Act, 1987: it makes packing in jute compulsory for certain goods.
    • Older shares: 60% of food grains and 50% of sugar.
    • Current norm: 100% of food grains and 20% of sugar, with relaxation of up to 30% allowed when supply falls short.
• Capital and banking:
  • Big capitalists in and around Kolkata keep capital flowing.
  • Agglomeration has brought banking and insurance.
• Historical advantage:
  • British merchants of the East India Company settled early at Kolkata, so the city had a head start.
  • Europe’s need for jute bags in the 19th century, and British enterprise and capital, drove initial growth.
• These factors keep the industry confined largely to West Bengal, and to the Hugli basin in particular.

Dispersal

• There has been some limited dispersal after Independence, within four other jute regions:
  • North-East India, on favourable environmental conditions
  • North-eastern plains of Bihar, on favourable rainfall and soil
  • Tarai of Uttar Pradesh
  • Eastern coastal region
• Causes of dispersal:
  • Rising demand from the sugar industry in Uttar Pradesh and the cement industry in Madhya Pradesh.
  • The trend of mixing jute with other fibres, which drew mills towards them, for example mesta in South India, especially Andhra Pradesh.

Distribution of Mills

• West Bengal has the largest concentration, with more than 80% of production and mills.
  • Older detail: 64 mills and 39,623 looms, which made 81% of mills, 79% of looms and over 84% of jute goods.
• Dispersal has gone beyond the State, with Andhra Pradesh at about 10% and the rest mainly in Uttar Pradesh and Bihar.
• The belt: most mills lie within 64 km of Kolkata, in a strip about 100 km by 3 km lining the two banks of the Hugli.
  • Hugli mills are larger and more productive than those elsewhere.
• Mill counts:
  • Older count: 83 composite mills, of which West Bengal 64, Andhra Pradesh 7, Bihar 3, Uttar Pradesh 3, Assam 2, Chhattisgarh 2, Odisha 1 and Tripura 1.
    • Looms stood at 49,529 in January 2012: 21,122 hessian, 26,663 sacking and 1,744 others.
  • 2023 estimate: about 95 mills, of which about 75 were working, most of them on the Hugli.

• This map records raw jute output in 2016-17, not mills. In 2024-25, jute and mesta output came to 88 lakh bales.

• This map marks only Kolkata and Silghat. The table above lists the other centres.

Exports

• The export trend: India lost much of its market after World War II and through the rise of synthetic substitutes.

• Environmental concern over non-biodegradable bags in some advanced countries has turned the tide somewhat in jute’s favour.
• Buyers: the USA, Russia and the UAE took the largest shares in older data, followed by the UK and Germany. Others include Canada, Australia, the Czech Republic, Slovakia, Argentina, Japan and Singapore.
• Products: gunny bags, hessian cloth, canvas, carpet backing, rugs, cordage and twine.

Problems of the Jute Industry

• Shrinking demand: overall demand in the international market is falling.
• Synthetic competition: packing materials from Europe and North America are cheaper and last longer, which has narrowed the market.
• Foreign rivals: Bangladesh and China compete with better goods, and new Bangladeshi mills turn out better quality at lower rates.
• Bulk handling in the USA, Argentina, Canada, Japan and Europe has cut the need for sacks.
• High costs: Indian jute products cost comparatively more.
• Local fibres: the supply of alternatives such as mesta, especially in Andhra Pradesh, has reduced demand for jute.
• Old machinery: apart from a few units, mills run age-old machinery, with efficiency of about 80% at best.
  • Frequent breakdowns mean defective and inferior goods, and modernisation and automation have lagged.
  • The ministry still lists obsolete machinery, synthetic competition and fluctuating raw jute prices as key challenges (2025).
• Infrastructure: bottlenecks of power, transport and capital threaten the industry’s future.
• Raw material: despite higher area and yield, supply falls short of need, leaving installed capacity underused.
• Labour: strong unions in West Bengal bring frequent strikes and lockouts.
• The 2025 raw jute crisis:
  • Trade curbs: India restricted jute goods from Bangladesh to the Nhava Sheva seaport on 27 June 2025 and extended the curb on 11 August 2025.
  • Bangladesh put raw jute exports under conditional approval on 8 September 2025.
  • Raw jute prices reportedly climbed from Rs 7,500 to Rs 10,000 per quintal, and at least 14 mills in the Hugli belt faced stoppages or disruption.
  • In December 2025, the mill association warned that over half of West Bengal’s mills could shut by March 2026.

Measures and Prospects

Measures Taken

• Diversification: clothing, decorative items, carpets, matting, packing goods and more have widened the industry’s scope.
  • Jute diversified products are still only about 8% of output.
• Quality: new ways of bleaching, dyeing and finishing give softer, lustrous and attractive goods.
  • Jute now serves uses from low-value geotextiles to high-value carpets, apparel, composites, upholstery and furnishings.
• Cost: research and modernisation aim to bring new technology, better machinery and lower costs. Its eco-friendly character gives it good prospects against synthetics.
• Area: cultivation is being expanded, for the sugar and cement demand noted above.
• Mandatory packaging: jute is renewable and environment-friendly, so its use must be encouraged, for example through compulsory packing.
  • Older orders also covered cement and fertilizer, with the Food Corporation, oilseeds and tea sectors expected to follow.
• National Jute Manufactures Corporation: formed to strengthen the industry, it modernised its units and later took up revival of the Khardah, Kinnison and RBHM mills.
  • The Union Cabinet approved its closure, along with Birds Jute and Exports Ltd, on 10 October 2018.
• Jute Technology Mission (2006): approved on 2 June 2006 at Rs 355.56 crore, with four mini-missions:
  • I (9 November 2006): research and development
  • II (21 December 2006): transfer of technology
  • III (6 February 2007): marketing and exports infrastructure
  • IV (6 February 2007): modernisation and promotion of diversified products
  • Its capital subsidy for plant and machinery helped bring in over Rs 500 crore of investment.
• National Jute Board Act, 2008 set up a board for the development of cultivation, manufacture and marketing.
• Current support (2025): capital subsidy for plant and machinery, Jute Resource cum Production Centres, Jute Raw Material Banks and production-linked incentives.
  • The National Fibre Scheme of the 2026-27 Budget includes jute.

Future Prospects

• Prospects are brighter for these reasons:
  • Diversification of products
  • Environmental awareness
  • Bans on polythene and plastic bags
  • Growing use in soil conservation
  • Bunds, river embankments and landslide protection
  • Apparel made from jute blended with cotton